Exam 2: The Financial Statement Auditing Environment

What auditing standards are used to conduct an audit for a privately-held corporation? What auditing standards are used to conduct an audit for a publicly-traded corporation? What organization is responsible for setting each of these sets of standards?

What are the three PCAOB general auditing standards found within the 10 GAAS (NOT the three main categories of GAAS)and why is each important?

With respect to an entity's financial statements,describe both the responsibility of management and of the auditor.

The Audit Committee consists of

Which of the following best describes the general character of the three PCAOB generally accepted auditing standards that are classified as standards of fieldwork?

Which of the following best describes the role of corporate governance?

The largest public accounting firms typically are structured as

A CPA is most likely to refer to one or more of the three PCAOB general auditing standards in determining

Which of the following is NOT a requirement of the Sarbanes-Oxley Act?

Which of the following is not included in the broad category of assurance services?

A financial statement audit is generally organized based on the five basic business processes or cycles.

PCAOB auditing standards must be followed on all financial statement audits performed in the U.S.

The three PCAOB standards of fieldwork are concerned with

A series of business and related auditing failures led to the passage of the Sarbanes-Oxley Act (2002).

Which of the following best describes what is meant by generally accepted auditing standards?

Which is not an attribute of an external auditor?

Typically,an external auditor first gets supervisory experience at what level of authority?

External auditors are referred to as "external" because

Jane Goodperson performed an audit on the Quagmire Corporation and issued an unqualified opinion.Jane performed the audit with due professional care and in accordance with generally accepted auditing standards.Two months after the report is issued,Jane discovers on the news that the CEO of Quagmire,Johnny Best,had been stealing small amounts of inventory.The amount,however,is immaterial compared to the overall inventory of the corporation.Jane soon receives a call from Quagmire's CFO,Mark Beastly.Mark wants Jane to refund her audit fees.Mark thinks Jane did not properly perform the audit,as she did not discover this fraud.Further,he feels that now Quagmire's financial statements are not fairly stated because of Jane.How should Jane respond to this claim?

Mike has just graduated from State University with a bachelor's degree in accounting.He would like to pursue a career in auditing.What options does Mike have? Describe three auditing career options,including a description of the organization Mike would work for.